China Factory Unrest a Fresh Headache for Foxconn

A brawl at a Foxconn factory that disrupted production at Apple's main China supplier for 24 hours highlights regimented dormitory life and thuggish security as major sources of labor tension in China.

While unrest often flares in China as low-paid workers agitate for better pay and conditions, the conflict at Foxconn's Taiyuan facility in northern China was notable for its scale and severity, even if not directly related to shop-floor conditions.

It marked a blow to Apple's top supplier as it ramps up production to meet orders for the iPhone 5 and seeks to rehabilitate its image after a labor audit this year found flaws.

The company does not say which of its plants supply Apple but an employee told Reuters that the Taiyuan plant was among those that assembled and made parts for the iPhone 5. Some workers said they were making the iPhone 4s.

Details of the melee remain sketchy as police and company officials investigate, but employees interviewed by Reuters said tension between workers and security guards boiled over on Sunday evening after a worker was severely beaten.

That led to thousands joining the fracas and about 40 people were injured, according to Foxconn and Chinese media.

The movement of workers from other Foxconn plants to Taiyuan may have contributed to friction between groups of laborers facing heavier workloads and crowded dormitories as production intensified to meet Apple targets, rights groups and workers said.

It was quiet on Tuesday outside the factory, with police keeping watch. Gates had been torn off hinges and windows smashed, and a voice on a loop recording broadcast over a loud speaker appealed for people to maintain order.

"There were thousands of bystanders and they just couldn't control it. It was just smash and destroy," said a 29-year-old worker who would only give his surname Xiang.

Xiang said several thousand police were eventually deployed to quell the unrest.

Foxconn Technology Group of Taiwan, the trading name of Hon Hai Precision Industry Co., is the world's largest contract maker of electronics for global brands such as Hewlett Packard, Nokia and Dell as well as Apple.

Foxconn said on Tuesday the one-day closure would not disrupt supplies from the factory where 79,000 people work.

"PRODUCT SHORTAGES, PRESSURE"

The company said the unrest was triggered by a personal dispute that spun out of control, rather than harsh conditions in the factory.

Louis Woo, a Foxconn spokesman, said the security personnel involved were under contract with a third party at a privately managed factory dormitory, adding that their attitude "is not too good."

In the past, Foxconn security personnel have been known for bullying and as tough enforcers of efforts to stop theft, including the pilfering of Apple prototypes, with workers being subjected to stringent body searches.

In 2010, Foxconn guards roughed up a Reuters journalist outside a factory in Shenzhen.

Several Taiyuan workers said some tension had arisen because of the deployment of workers from other Foxconn plants to bolster manpower in Taiyuan, with friction between workers from different provinces including Henan and Shandong.

"This happens in many companies, especially big ones," Woo said of the movement of workers around the country.

"We have 1.1 million workers in total in China, the advantage is we can mobilize our workers when one business line suddenly needs more people. Relocation happens very often."

"The whole Apple production chain has problems," said Li Qiang, with the New York-based China Labor Watch, that has scrutinized Apple and Foxconn for years.

"Its sales and marketing strategy involves launching a product suddenly, without maintaining much inventory ... so the subsequent product shortages help build demand, but also place extreme pressures on workers."

Foxconn has begun a series of reforms after facing accusations of poor conditions and mistreatment of workers.

Li Qiang, the labor activist, said workers at Foxconn's giant plant in Zhengzhou, in Henan province, were largely working on the iPhone 5, and were also facing great pressure, with 70 hours a week common, despite pledges by Apple and Foxconn to cap work at 60 hours.

A brawl at a Foxconn factory that disrupted production at Apple's main China supplier for 24 hours highlights regimented dormitory life and thuggish security as major sources of labour tension in China.